TMI Blog2020 (3) TMI 543X X X X Extracts X X X X X X X X Extracts X X X X ..... fixed deposits of ₹ 41,04,400/- as per the copies of evidences placed before us. The deposits were made in the same financial year, but not in the subsequent assessment year as stated by the Ld.AO. Deposit of ₹ 25,00,000/- was made in Andhra Bank on 03.03.2010 and ₹ 16,04,400/- on 09.03.2010. The Board has clarified in Instruction No.883 dt.24.09.1975 that investment of the net consideration of fixed deposit with a bank for a period of six months and above would be regarded as utilized for acquiring another capital asset within the meaning of section 11(1A) - Since the assessee has made the investment in fixed deposits for more than 6 months in the same financial year, we hold that the assessee is entitled for exemption of sale consideration u/s 11(1A) of the Act and the same required to be considered as for acquiring another capital asset. Accordingly, the orders of the lower authorities are set aside and the appeal of the assessee on this issue is allowed. Application of 50C for sale consideration of the immovable property - HELD THAT:- In the instant case, the assessee has sold the property consisting of 3 plots for sale consideration of ₹ 40,99,200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 months. Since the appeal is taken up for hearing simultaneously, the stay application filed by the assessee is dismissed in limine. 2. Ground No.1 is general in nature which does not require specific adjudication. 3. Ground No.2 is related to the sustaining the addition of ₹ 60,94,067/- by the Ld.CIT(A) representing long term capital gains. Brief facts of the case are that the assessee is a Hindu religious charitable institution, for the relevant assessment year 2010-11, the assessee sold the immovable properties situated in Nellore and has not filed any return of income. Therefore, the Assessing Officer (AO) issued notice u/s 148 on 28.03.2017 and in response to which, the assessee filed a letter stating that there was no taxable income by way of long term capital gains. Subsequently, the assessee filed the Nil return of income on 23.08.2017 and the AO issued notice u/s 143(2) dated 04.10.2017, taking up the case for scrutiny. 3.1. As discussed earlier, the assessee sold the immovable property consisting of 3 plots for a consideration of ₹ 40,99,200/- and the market value of which as per the SRO was ₹ 67,41,740/-. During the assessment proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Since the impugned assessment year is 2010-11, the proviso to section 12A(2) which was inserted by the Finance (No.2) Act, 2014 has no application in the assessee s case. The AO further observed that as per proviso to section 12A(2) of the Act, the assessee ought to have carried on the objects and the same are to be continued on the date of granting the registration. In the instant case, the AO was of the view that the assessee s Trust has no specific activity before the Trust s objects are reduced in writing in 2016 vide Trust Deed dated 28.04.2016. Thus viewed that even if it is considered that the proviso to section 12A(2) of the Act is applicable retrospectively, in the absence of specific objectives before 2016, the benefits of proviso to section 12A(2) cannot be extended to the assessee. 4.2. The third ground on which the assessee s request for exemption was denied under section 11(1A). The AO observed that the consideration received was deposited in subsequent assessment year, therefore the assessee is not entitled for exemption u/s 11(1A) of the Act, as per CBDT Circular No.883 dated 24.09.1975. 4.3. With regard to assessment of capital gains and the adoption of fair ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciety Vs. ACIT dated 30.06.2017, wherein the coordinate bench has taken view that the benefits u/s 12A required to be extended to the pending assessments also. 8. With regard to objects of the Trust, the Ld.AR submitted that though the Trust deed was executed on 28.04.2016, the assessee is carrying on the charitable activities as provided in Trust Deed dated 28.04.2016 in the earlier years also and there was no changes in the activities. Therefore, argued that both the lower authorities have erred in giving a finding that there were no specific activities prior to 28.04.2016, hence submitted that rejection of assessee s claim for exemption of income u/s 11 and 12 for the assessment year is unjustified merely because there was no written deed though the activities were carried out by the assessee. 9. With regard to exemption u/s 11(1A), the assessee filed evidence in the form of copies of fixed deposit receipts made in Andhra Bank dated 08.03.2010 for deposit of ₹ 25,00,000/- and also certified copy of Dhanalakshmi bank, wherein the assessee has made the deposit of ₹ 16,04,400/- on 09.03.2010 and argued that it has made the deposits in the same financial year in wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... argued that there is no reason to reject the same. We observe from the Trust Deed dated 28.04.2016 that the Trust Deed was reduced in writing only for statutory compliance and it was written in the Trust Deed that all the objects and purposes for which the Trust should pursue were taken as objects. Thus as stated by the Ld.AR, we are of the considered opinion that the Trust was carrying on the same activity which was written in the Trust Declaration dated 28.04.2016, hence, there is no case for rejection of the assessee s contention for extending the benefits of exemption u/s 11 and 12 for pending assessment as provided u/s 12A(2) of the Act. Though the assessment year related is 2010-11, as on the date of granting the registration, the assessment for the impugned assessment year was pending. This Tribunal has taken a view in the case of Ganta Sri Ram Educational Society and held that the assessee would be eligible for exemption u/s 11 and 12 for pending assessments as on the date of registration. For the sake of clarity and convenience, we extract para No.6 of the order cited supra which reads as under : 6. In the instant case, the assessee is carrying on educational acti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 41,04,400/- as per the copies of evidences placed before us. The deposits were made in the same financial year, but not in the subsequent assessment year as stated by the Ld.AO. Deposit of ₹ 25,00,000/- was made in Andhra Bank on 03.03.2010 and ₹ 16,04,400/- on 09.03.2010. The Board has clarified in Instruction No.883 dt.24.09.1975 that investment of the net consideration of fixed deposit with a bank for a period of six months and above would be regarded as utilized for acquiring another capital asset within the meaning of section 11(1A) of the Act. Since the assessee has made the investment in fixed deposits for more than 6 months in the same financial year, we hold that the assessee is entitled for exemption of sale consideration u/s 11(1A) of the Act and the same required to be considered as for acquiring another capital asset. Accordingly, the orders of the lower authorities are set aside and the appeal of the assessee on this issue is allowed. 14. The next issue is related to application of 50C for sale consideration of the immovable property. In the instant case, the assessee has sold the property consisting of 3 plots for sale consideration of ₹ 40,99 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 000/- to Mr.P.N.Roy. The assessee explained that it has appointed Mr.P.N.Roy as secretary for management of the Mutt affairs and this amount was given to him as reimbursement of the construction expenses incurred by Swamiji in the earlier years for construction of mutt buildings. The AO made the addition since the assessee has not provided opportunity to cross verify the genuineness of the above transaction u/s 69C of the Act. 19. Against which the assessee went on appeal before the CIT(A), but did not succeed, therefore, the assessee is in appeal before us. 20. We have heard both the parties and perused the material placed on record. The proviso to section 69C is invoked in a situation where the assessee incurs expenditure and offers no explanation about the source of such expenditure. In the instant case, the AO has not doubted the source of expenditure and he simply made the addition, for not offering the cross verification of the genuineness of the transaction. From the order of the AO, it is clear that the amount was paid by cheque to Mr.P.N.Roy and the expenditure was incurred by Sri Sidheswarananda Bharathi Swamy which was reimbursed by the mutt. The source and the gen ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
